The Amazon Ultimatum

Amazon invites Executives from General Mills, Mondelez and other packaged goods makers to a three-day gathering in May.

During this meeting Amazon wants to convince Big Brands like Cheerios and Oreo to bypass the major retailers such as Walmart.

Amazon’s end goal is to revolutionize retail by shipping products straight to the consumers door and by working closer with the manufactures it will be able to achieve this goal.
This global vision’s main aim is to get the products to the customer quickly, one of the major discussion points will be packaging.

Getting the manufactures to change the way they package the goods will be one milestone in this task, products such as cereal or cookies for example would need to be packed in a durable and courier friendly packaging.

Amazon has already managed to achieve this in the electronics and toys department. The company used a new methodology to develop packages from plastics that were more easier to ‘pop’ open, unlike their previous counterparts.

The Ultimatum

Amazon does put a warning out to the brands who are not willing to corporate with their new idea. Amazon has the power to produce its own range of goods, as we have seen in its own brands, AmazonBasics and AmazonElements.

The Future

This push for Amazon to be the channel for D2C sales on behalf of the manufacturers will surely get a response from the traditional retailers such as Walmart.

Another possibility we may see is that certain products may be only eligible for Prime only customers. Amazon has recently tested this out on their U.S. Site with the new Nintendo Switch during an initial sale.